Will Coronavirus hit used car prices? (Vol 2)
Discussion
Lil_Red_GTV said:
In the medium term (say, the next 5 years) there could well be sharp falls in the value of all mainstream ICE cars as the shift to electric accelerates. The values of genuinely collectable petrol cars might hold firm or rise, but I would not put Golf Rs or 135i's in that category.
There is a difference though between collectable and desirable.Golf Rs / M135i / M140i may not be collectable in that timescale however i would envision there will still be demand for them.
I dont particularly see a massive "jump" to electric in that timeframe, particularly in the Hot Hatch arena.
Also, as has been found (pre COVID) with diesel car prices, whilst the new car market may be tempted away with whatever the best deal is at the time on a new car (small engined petrols came in to vogue) this led to less new diesel cars being sold, but the used car demand was still there for them, so less supply drove prices of good used diesels up.
Roll that forward to when new car buyers are being incentivised / encouraged / moved in to electric cars, used car buyers wont get those incentives and wont have the benefit of the new car warranty on an electric car, so could still defer to ICE variants.
I recall watching an interview on Tv with a very rich billionaire type who cashed out just before the GFC and didn’t lose any money
The interviewer asked him why he sold up and got out the market and how he saw it coming
His answer was simple, in that he said his postman stopped him and started telling him he had started buying shares and was going to make a fortune
At that point, he said, he knew it was time to get out the market
The interviewer asked him why he sold up and got out the market and how he saw it coming
His answer was simple, in that he said his postman stopped him and started telling him he had started buying shares and was going to make a fortune
At that point, he said, he knew it was time to get out the market
I bought a vw transporter back in October last year, 9k miles,nice colour,only boggo startline spec,I gave 15k no vat for it,wbac have it at nearly 20k at the minute.
Think im going to chance a advert for it for 22k the way they have shot up recently,the price of campers has gone ballistic!
Think im going to chance a advert for it for 22k the way they have shot up recently,the price of campers has gone ballistic!
Lil_Red_GTV said:
In the medium term (say, the next 5 years) there could well be sharp falls in the value of all mainstream ICE cars as the shift to electric accelerates. The values of genuinely collectable petrol cars might hold firm or rise, but I would not put Golf Rs or 135i's in that category.
Depends what level of driver involvement those ice cars offer. Those offering the best package will be the desirable ones fetching the highest prices particularly in an increasingly diluted autonomous driving environment.The desirable ones which which appreciate will be the manual pre gpf cars especially those rarer and good spec cars.
av185 said:
321boost said:
i disagree the higher prices are here to stay. used car prices are likely to climb near their new sale price and maybe beyond but how long for? no one knows probably permanent increases
Correct.Someone mentioned some run of the mill cars including the Golf R which will continue their overall downward trajectory. Again this is doubtful. The Golf R is an interesting one as massive oversupply and cheap subsidised pcp deals over the last few years meant the market was flooded with particularly poverty spec cars many appearing through BCA from VW Finance and values took a hit but they were good value.
But the new model is typically substantially dearer and there are currently no cheap deals to be had which will push up particularly late run used cars especially the rare and now unique manual with more power 310 bhp no parasitic auto gearbox power losses less weight and in high spec.
2 to 3 year old Golf Rs are a prime example of a model that will take a couple of years at least to get back to where there were recently residually and this is typical of many cars vanilla medium or high end.
Edited by av185 on Thursday 24th June 16:58
Edited by av185 on Thursday 24th June 16:59
Teebs said:
Relatives bought a 2015 RR 4.4V8 in November last year for £40k (main dealer). WBAC are now offering just over £32k - much bigger hit than anticipated...
Vehicles such as this being a typical gas guzzler and high VED will always be hard to shift thus crucifying residuals even in a rising market especially in the summer.Will be worth hanging on till the winter.
Anonymous-poster said:
I asked this a few weeks back but maybe no one knows but are the likes of Rockingham getting empty?
Short of sending a drone up over the place I don't think we will get an answer to that.It would be interesting to know, Bruntingthorpe was the other large storage place.
av185 said:
Vehicles such as this being a typical gas guzzler and high VED will always be hard to shift thus crucifying residuals even in a rising market especially in the summer.
Will be worth hanging on till the winter.
Agree, just thought it was of interest. It's unsurprisingly been back to the main dealer 4 times for repair work, POS.Will be worth hanging on till the winter.
321boost said:
dont wet yourself they are not going to back to where they were recently it is likely a golf R will cost the same as they did when new or even more. the days of you buying alot of car for small money are over
Can't think why I would wet myself over a Golf R. 
Feel free to wet yourself if you feel inclined to do so however.
People are just barking mad
One of my best mates who had never been camping and caravanning in his life has recently bought a 15 year old tag axle 8.5+m motor home
He decided he wanted one for “ staycations” as he can’t go to the Costa’s with his kids
He rang up about a few and every one was sold immediately it went live .. this one came up, he rang the bloke and drove straight to the other end of the country beating another fella as the seller said first one here with the money gets it !
He went to Scotland in it .. his wife refused to drive it .. it did 20mpg at 55mph and doesn’t want to go in it again
It’s now parked on the street outside his house while he try’s to find somewhere to store it
Worst thing is he paid £40k without any habitation or other checks
He decided he had to have one and they were selling so fast he bought the first one he could
He reckons he’ll be able to sell it for more than he paid for it
Just mental, and that’s where we are at with people it’s like mice on the wheel nobody wants to be the one to jump off .. but when the wheel jams they’ll all be in a heap on the floor
One of my best mates who had never been camping and caravanning in his life has recently bought a 15 year old tag axle 8.5+m motor home
He decided he wanted one for “ staycations” as he can’t go to the Costa’s with his kids
He rang up about a few and every one was sold immediately it went live .. this one came up, he rang the bloke and drove straight to the other end of the country beating another fella as the seller said first one here with the money gets it !
He went to Scotland in it .. his wife refused to drive it .. it did 20mpg at 55mph and doesn’t want to go in it again
It’s now parked on the street outside his house while he try’s to find somewhere to store it
Worst thing is he paid £40k without any habitation or other checks
He decided he had to have one and they were selling so fast he bought the first one he could
He reckons he’ll be able to sell it for more than he paid for it
Just mental, and that’s where we are at with people it’s like mice on the wheel nobody wants to be the one to jump off .. but when the wheel jams they’ll all be in a heap on the floor
321boost said:
dont wet yourself they are not going to back to where they were recently it is likely a golf R will cost the same as they did when new or even more. the days of you buying alot of car for small money are over
f
k me there are some idiots on PH nowadays.Go and study simple economics - supply and demand curves. Then re-read some of the posts above about the recent (short-term) constriction in supply, AND the recent (temporary) increase in liquidity for many households, which has led to an equally temporary increase in demand.
You need go no further than this. There's no big secret, nothing special at work. Cars are a commodity for 99% of buyers, simple as that. And will remain so into the 2030s and full electrification.
SOME specialist cars - supercars, rare sports cars, homologation specials, limited editions of legendary models (e.g. Defender, MX5...) WILL appreciate as they get older, for the simple reason that the market perceives them as having more value due to either rarity, motorsport links, heritage, popular culture links or (more rarely) performance. These will only ever be a small minority, as if they were anything else the value would disappear.
Schmed said:
Teebs said:
Relatives bought a 2015 RR 4.4V8 in November last year for £40k (main dealer). WBAC are now offering just over £32k - much bigger hit than anticipated...
Isn’t that just the dealer margin? Most of that £8k was lost the day it was purchased.
havoc said:
uck me there are some idiots on PH nowadays.
Go and study simple economics - supply and demand curves. Then re-read some of the posts above about the recent (short-term) constriction in supply, AND the recent (temporary) increase in liquidity for many households, which has led to an equally temporary increase in demand.
You need go no further than this. There's no big secret, nothing special at work. Cars are a commodity for 99% of buyers, simple as that. And will remain so into the 2030s and full electrification.
SOME specialist cars - supercars, rare sports cars, homologation specials, limited editions of legendary models (e.g. Defender, MX5...) WILL appreciate as they get older, for the simple reason that the market perceives them as having more value due to either rarity, motorsport links, heritage, popular culture links or (more rarely) performance. These will only ever be a small minority, as if they were anything else the value would disappear.
remember at the start when people said the prices will drop?Go and study simple economics - supply and demand curves. Then re-read some of the posts above about the recent (short-term) constriction in supply, AND the recent (temporary) increase in liquidity for many households, which has led to an equally temporary increase in demand.
You need go no further than this. There's no big secret, nothing special at work. Cars are a commodity for 99% of buyers, simple as that. And will remain so into the 2030s and full electrification.
SOME specialist cars - supercars, rare sports cars, homologation specials, limited editions of legendary models (e.g. Defender, MX5...) WILL appreciate as they get older, for the simple reason that the market perceives them as having more value due to either rarity, motorsport links, heritage, popular culture links or (more rarely) performance. These will only ever be a small minority, as if they were anything else the value would disappear.
havoc said:
I can't see it, not past 12 months time...
- Car makers can't survive on these lower volumes. They'll find a way to unlock the supply issues. Otherwise there'll be multiple plant closures across Europe, with probably 6-figure job losses up and down the supply chain in Europe. Governments won't allow that, but EU rules prevent direct subsidies, so pressure will be applied behind the scenes...
- So supply WILL increase again.
- ...against a historic trend of steadily decreasing demand, note
- ...so the OEMs, once any order backlog is under control, will want to give punters the confidence to order a new car again.
- ...so there'll be deals to be had...which will knock on down the used-car market.
I would guess at peak used-car prices somewhere around Q4 this year. +/- a few months at most.
Completely agree, I look forward to Deep Thoughts updates!- Car makers can't survive on these lower volumes. They'll find a way to unlock the supply issues. Otherwise there'll be multiple plant closures across Europe, with probably 6-figure job losses up and down the supply chain in Europe. Governments won't allow that, but EU rules prevent direct subsidies, so pressure will be applied behind the scenes...
- So supply WILL increase again.
- ...against a historic trend of steadily decreasing demand, note
- ...so the OEMs, once any order backlog is under control, will want to give punters the confidence to order a new car again.
- ...so there'll be deals to be had...which will knock on down the used-car market.
I would guess at peak used-car prices somewhere around Q4 this year. +/- a few months at most.
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